False| ✔| 5.00| Correct. You understand compounding.| Total| | 5.00 / 5.00| |
Basics of compounding.
(5 points) Ranjit began setting aside $6,000 per year in a mutual fund at the age of 25. He has turned 34, and has just made a deposit. The mutual fund has returned 6.5% annually. How much does Rajit have in his account today? Your Answer| | Score| Explanation|
80967| ✔| 5.00| Correct. You know how to calculate the FV of an annuity.| Total| | 5.00 / 5.00| |
Basic FV calculation. He should have a minimum of $60,000. Why? Question 3
(5 points) Mohammad has just turned 21 and now has access to the money his parents have been putting away in an account for him since he was 5 years old. His mother has asked him to guess what his account is worth given that they have invested $1,000 every year in the account starting on his 5th birthday and have just made one. The interest rate on the account has been 3.5% annually. How much is Mohammad’s account worth today? (Enter just the number without the $ sign or a comma; round off decimals.) Answer for Question 3
Your Answer| | Score| Explanation|
193141| ✘| 0.00| |
Total| | 0.00 / 5.00| |
FV value of an annuity calculation. Draw a time line. The amount should be a minimum of $17,000. Why?